CSR in India: Are Companies Doing Enough?

Can corporate social responsibility (CSR) in India have a central role in the transformation of this dynamic yet challenged land? At a macro level, India’s transformation has been an impressive and inspiring story the past decade. Visiting the country recently, I could see why India has become a hub of innovation: at a core level, its people accomplish much with few resources. Hence the economy overall has boomed this century.

Children in Mumbai’s M Ward

But as journalist P Sainath reminded those of us traveling with the International Reporting Project, stratospheric economic growth has not benefitted everyone. Despite an average of nine percent GDP growth the past decade, UNICEF estimates child malnourishment in India is stuck at a stubborn 46 to 47 percent, double the rate of many sub-Saharan African nations. Only 31 percent of children have access to safe sanitation. On the United Nation’s Development Program’s (UNDP) Human Development rankings, India ranks at number 134. Then add a bevy of issues including education, women’s rights, safe drinking water and environmental degradation. Clearly India’s government is not or cannot do enough to lift its most vulnerable citizens; and many of the NGOs we met last month, despite their valiant efforts, cannot fill the gaps.

So can CSR in India make a difference, especially with the new CSR law, or Companies Bill, the Indian parliament recently passed requiring companies of a certain size to divert two percent of their net average profits of the previous three years to programs that result in a “social good?”

“Growth means nothing in itself. Growth for growth’s sake is the ideology of the cancer cell.” - Journalist P Sainath in a talk to the International Reporting Project, Mumbai, February 22

Growth in India certainly has been relentless, especially for the wealth of the nation’s nouveau riche. Plenty of money certainly floats throughout India now, or at least in some hidden overseas accounts. In 1991 India did not have a single billionaire; now the country boasts 48. Those 48 individuals alone control one-eighth to one-ninth of India’s GDP, says Sainath (Forbes recently estimated 10.9 percent). Sainath also noted during his talk that after years of narrowing wealth inequity, the reverse has occurred in India since its government opened the economy during the early 1990s. Much work still remains to be done in rural areas and of course large cities including Mumbai and New Delhi.

The opportunities are ripe for companies in all sectors on a bevy of challenges, including health, nutrition, children’s survival and water. Many Indian companies such as Infosys and Tata are undertaking impressive work on employee engagement; others are driving a culture of innovation by embarking on big, bold and even“unreasonable” goals. But plenty of communities in India, from the colonies housing the poorest in the cities’ outskirts to remote rural villages, are crying out for more engagement so they are not stuck in the margins.

Many CSR projects in India are at the pilot level: SAP has organized corporate sabbaticals so its employees could advise social entrepreneurs; Ford is experimenting with mobile health clinics; Microsoft has donated technology to health clinics; Vodafone sends 25 of its top employees to advise NGOs throughout the country. Retailers including PUMA and Marks & Spencer have opened “green stores” that certainly stand out in India’s exciting, bustling and polluted cities. And do not think multinationals are carrying the burden; Indian companies from all industries are experimenting with CSR programs that match society’s needs to these firms’ capacities and expertise. But glance at the work that can be done on the social and environmental fronts and the profits companies generate in India, and it is clear the country’s business community can do more.

“Corporate Social Responsibility? Or do you mean Corporate Legal Liability?” – P Sainath, February 22, Mumbai

Mr. Sainath shared a dim view of CSR in India. He dismissed such programs as a tool of corporate entities. His assessment of NGOs in India was even harsher as he alleged as many as 70 percent are either tax shelters or tools for corporations’ market research or market penetration. His dismissive opinions about CSR in India aside, it is important to remember Mr. Sainath is a man who spent much of his career walking thousands of miles and years of his time in India’s most remote, marginalized and underserved communities.

Much of India’s press, according to Mr. Sainath, is focused more on positive news involving India and the exploits of the country’s elite. Covering the poor in India indeed is a lonely business. Working with the poor, therefore, can give companies and their employees a reinvigorated purpose.

“Between fake optimism and cynical pessimism, there is a territory called hope.” – P Sainath, February 22, Mumbai

The beauty of the Indian spirit is that the oft-marginalized and dismissed poor has had a history of rising up and holding their own when pushed too far. Such achievements are all over the map: the poor were instrumental in ousting one of the world’s most powerful colonial empires after World War II; had a role in ending the reign of previous governments; and now achieve impressive feats such as huge harvests without the benefit of western genetically modified foods (GMOs).

Most likely the best efforts behind CSR in India will come from organizations who are closest to the poor and whom they serve with limited funds. Multi-nationals are quick to tout the work done on occasional water, education or technology projects, but for now dedicated local NGOs are completing the heavy lifting, without the benefit of a public relations machine broadcasting their efforts. Expect these small organizations’ work to be the driving force of CSR in India for quite some time.